One Big Beautiful Bill

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Reference: https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions

The One Big Beautiful Bill was signed into law on July 4, 2025 and is retroactive as of January 1, 2025. The main highlights of the bill are as follows:

  • Deductions for Seniors
    • Effective 2025 through 2028, individuals age 65 and older may claim an additional $6,000 deduction per individual ($12,000 for married couple)
    • Phases out for taxpayers with modified adjusted gross income over $75,000 ($150,000 for joint filers)
  • No Tax on Tips
    • Effective 2025 through 2028, employees and self-employed individuals may deduct qualified tips they received in occupations the IRS identified as “customarily and regularly receiving tips” on or before December 31, 2024
    • Maximum annual deduction is $25,000
    • Phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers)
  • No Tax on Overtime
    • Effective 2025 through 2028, individuals may deduct the portion of qualified overtime pay that exceeds their regular rate of pay (for example, the “half” portion of “time-and-a-half”
    • Maximum annual deduction is $12,500 ($25,000 for joint filers)
    • Phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers)
  • No Tax on Car Loan Interest
    • Effective 2025 through 2028, individuals may deduct interest paid on a loan used to purchase a qualified vehicle for personal use that meets other eligibility criteria. Lease payments do not qualify.
      • New vehicle purchases as of January 1, 2025
      • Has a gross vehicle weight rating of less than 14,000 pounds
      • Underwent final assembly in the United States
    • Maximum annual deduction is $10,000
    • Phases out for taxpayers with modified adjusted gross income over $100,000 ($200,000 for joint filers)
  • Energy Credits
    • Credits will end after December 31, 2025